In the first initiative of its kind, Sun Pharma Advanced Research Company (SPARC) will issue additional shares to its existing shareholders to raise funds to conduct clinical trials in the world’s biggest pharma market, the US.
SPARC, a publicly-listed company, is a hived-off entity of drug maker Sun Pharmaceuticals.
The proceeds from the Rs 200-cr rights issue will go towards safety and efficacy studies of a new form of cancer injection, Paclitaxel, in the US. It will also initiate the first phase of tests on the effectiveness of a new patient-friendly administration protocol for Paclitaxel in that country. A significant portion of the funds would also go towards servicing the loss-making entity’s debts.
SPARC had on January 25 sought the approval of the Foreign Investment Promotion Board to proceed with the rights issue and to offer, issue and allot partly paid-up rights shares to foreign institutional investors and non-resident Indians.
| WHAT IT TAKES Clinical trials are a costly and complicated business. Here’s why: |
| Three phases of clinical trials |
| Phase I: The candidate drug is tested in humans for the first time, with 20 to 100 volunteers or patients. Aimed at discovering if the drug is safe |
| Phase II: Evaluation of the candidate drug’s effectiveness in about 50 to 500 patients |
| Phase III: Study of the drug in a larger number (about 200 to 5,000) of patients to generate statistically significant data |
| Clinical trial costs |
| Investigator fees: Clinical trials are conducted at hospitals under the supervision of qualified doctors |
| Ethics committee fees: A clinical trial project can be started only after an approval from ethics committees and regulatory authorities |
| Study conduct and monitoring costs: The act of overseeing the progress of a trial, and of ensuring that it is conducted, recorded, and reported in accordance with the protocol, standard operating procedures |
| Project management costs: To manage and plan activities with the groups involved, viz, investigator team, monitoring team, data management and biostatistics team |
| Data management and biostatistics costs: All protocol-required information is recorded on forms and database is locked to obtain efficacy/safety tables |
| Study report costs: A written description in which the clinical and statistical discussion, presentations, and analyses are fully integrated into a single report |
| Pass-through costs: This includes travel, training, supplies, communication, record archival and storage costs |
SPARC is attempting to successfully develop a Paclitaxel Injection Concentrate for Nano dispersion (PICN) that is safer, needs shorter infusion time and delivers higher concentration of drug in tumour tissues. Paclitaxel is the globally established standard of care for several advanced stages of cancers such as those of breast, lung, ovary, cervix, esophagus and stomach, urinary tract and bladder, as well as cancers of the head and neck region.
The nano-particle technology platform is being tested by SPARC to deliver other products too.
Also Read
The company is also starting the final phase of clinical trials in the US on Baclofen, a spasticity treatment drug. It wants to see whether Baclofen capsules made using SPARC’s proprietary technology called Gastro Retentive Innovative Device (GRID) ensures longer retention of the medicine in the stomach, thereby increasing bioavailability of the drug. Baclofen GRS eliminates frequent day- and night-time dosing, and reduces the adverse effects from the peak concentrations, especially sedative effects, SPARC claims.
Of the Rs 200 crore the entity is planning to raise through rights issue, Rs 109 crore has been earmarked for the clinical trials of these two products. As of December 2011, the company had spent Rs 2 crore on the project.
According to SPARC disclosures, Rs 38 crore is the estimate for Phase-III clinical trials of Baclofen GRS capsule in the US. The other trials — PICN Phase-I Weekly Protocol and PICN Phase-III Clinical Studies in the US – are expected to cost Rs 71 crore.
The company also intends to clear its debts amounting to Rs 61 crore from the raised funds.
SPARC is focusing on developing a pipeline of technology platforms such as GRID for new drug delivery systems for oral, injectables and topical and new compounds in its chemical entity portfolio.
SPARC had posted a net loss of Rs 17.90 crore in the quarter ended December 31. Its loss was lower, at Rs 2.94 crore, in the comparable period last year. The company’s total income stood at Rs 4.51 crore in the quarter ended the quarter, compared to Rs 12.17 crore in the same quarter last financial year.
SPARC was demerged from Sun Pharma as a standalone pharma research and drug discovery company in 2007. The idea behind hiving off the new drug research operations was to de-risk Sun Pharma from the uncertainties connected with drug research.
India has only a handful of pharmaceutical companies, like Dr Reddys, Glenmark, Cadilla and Lupin, that do serious research in drug development. None of these have hitherto attempted to raise funds from shareholders to meet clinical trial expenses.